Midnight Trader | Jun 05, 2013 04:31PM ET
U.S. stocks fell for a second day, carrying the S&P 500 to its lowest levels in a month as investors continue to weigh the possibility of the Federal Reserve reducing or ending its bond-buying program and largely downbeat economic data. All 10 sectors in the S&P 500 lost ground, led by materials stocks despite small gains for most commodities. Shares of financial and consumer discretionary companies also fell hard in the selloff.
The Fed Effect
By the time the Fed's latest Beige Book summary of U.S. economic conditions came out at 2 p.m., market direction had already been long established. The central bank said the economy expanded at a "modest to moderate" pace in 11 of the 12 Federal Reserve districts, with broad-based gains ranging from business services to construction and manufacturing.
"Most districts noted slight to moderate gains in consumer spending and a moderate increase in vehicle sales," according to the report, which was compiled by the Minneapolis Fed. Hiring increased at a measured pace in several districts with some contacts telling the Fed they were having difficulty finding qualified workers.
U.S. Jobs
Earlier, the session got off to a soggy start after Automatic Data Processing said private employers added 135,000 new workers during May, up slightly from the prior month but trailing expectations for around 157,000 new hires. Revised nonfarm business sector productivity rose an annualized 0.5% pace during Q1, the Bureau of Labor Statistics reported Wednesday. Output rose 2.1% and hours worked grew 1.6% during the quarter with overall productivity climbing 0.9% from the first three months of 2012.
A measure of U.S. labor costs unexpectedly fell 4.3% in Q1, the fastest pace in over four years although analysts said the reading appeared to be distorted by a shift in employee compensation during the prior period to avoid a tax hike. The Labor Department initially had reported a 0.5% gain.
Commodities were mostly higher as traders looked for alternatives to stocks. Crude oil for July delivery settled 43 cents higher at $93.74 per barrel while July natural gas was little changed at $4.00 per 1 mln BTU. August gold rose $1.30 to finish at $1,398.40 per ounce while July silver added 6 cents to settle at $22.47 per ounce. July copper was little changed at $3.37 per pound.
Here's Where The Markets Stood At Day's End
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